As Labor Day approaches, the school year is off to the races. Pardon my ignorance, but I figured this out standing in line at Rite-Aid this weekend. There were throngs of kids buying pencils, backpacks, and colorful folders. I just wanted a diet coke, but their angry parents wouldn’t let me cut in front of them. We recently moved to the suburbs for the first time in our adult lives and it turns out “back to school” is quite the local event.
As family vacations come to a close, Labor Day coincides with investors getting back to serious business each year. Sadly, this holiday is the brain child of labor unions in the US. Over a century ago, our government gave in to jealousy of foreign communists. I enjoy my day off, so I won’t complain all that much.
The markets have found some solid ground to stand on over the past week and anxiety significantly subsided. That doesn’t mean the roller coaster is over. But chances are, market action will pick a direction fairly quickly and move with conviction.
While we wait for this to happen, a few headlines piqued my interest today.
One of America’s serious economists writes serious nonsense here: http://www.tnr.com/article/economy/94275/shiller-infrastructure-debt-stimulus. Why would he advocate raising taxes, then spending the funds on some sort of government labor pool? I guess Dr. Shiller thought he would put a new twist on Keynesian economics, but this just sounds crazy. Dropping money from helicopters on the masses would be a better solution to our current economic malaise. Our private sector needs direct stimulus, not a new bureaucratic spending program. Regardless, I don’t know any out of work mortgage brokers or car salesmen ready to pick up a shovel to dig ditches. They would rather collect unemployment.
This story shows how the economy is healing itself in new and interesting ways: http://www.bloomberg.com/news/2011-08-30/grandma-bunks-with-jobless-kids-as-multigenerational-homes-surge.html. Nobody likes living next to a multi-generational (communal) home with six cars in the driveway. But people do what they must to survive. Ironically, the communal living concept comes to us courtesy of communist states like China and the former USSR, just like Labor Day.